JK Industries plans demerger

JK Industries is planning to demerge the investments of the company into a separate undertaking. The strategy is to provide the residual tyre business a better focus.

The company's board has today approved the proposal of demerger. According to the demerger scheme, the investments would be transferred to a new company at their respective book value. The appointed date for the above scheme will be October 1, 2005.

For the purpose of demerger, the existing equity share capital of JK Industries "" Rs 37.46 crore, which comprises 3.74 crore equity shares of Rs 10 each, will be allocated between JK Industries and the new company, the company informed the Bombay Stock Exchange.

Post-demerger, the core company will have an equity capital of Rs 28.09 crore, consisting of 2.80 crore fully paid-up equity shares of Rs 10 each. The new company will have a capital base of Rs 9.36 crore entailing 93.64 lakh fully-paid up equity shares of Rs 10 each.

The shareholders holding 100 equity shares of JK Industries will get 75 fully paid-up equity shares of Rs 10 each of the main company and 25 fully paid-up equity shares of Rs 10 each of the new company.

The company has roped in Ernst & Young and Amarchand Mangaldas and Suresh A Shroff & Co (AMSS) as advisors and legal advisors, respectively, for the demerger, it informed the BSE today.